Suez Canal makes efforts to remove blockage as shipping levels rise, tankers move away

CAIRO (Reuters) – The Suez Canal halted Friday’s efforts to free a large sticky cargo ship and end a blockade that caused shipping rates for fuel tankers to go up and disrupted global supply chains for all anything from grains to baby clothes.

Shipping rates for oil production tankers have almost doubled after the 400-meter (430-yard) range ever landed in the critical trade waterway on Tuesday.

Attempts to free its release could take weeks and be complicated by unstable weather, threatening costly delays for companies already dealing with COVID-19 restrictions.

Shoei Kisen, the Japanese owner of Ever Given, denied a news report that he was aiming for its release before Saturday night, saying renovation efforts were underway.

The Suez Canal Authority (SCA) said efforts to free the vessel with thatching would begin again as soon as dredging work was carried out at its bow to remove 20,000 cubic meters of sand.

“In addition to the existing scraps on site, the vessel now has a dedicated switch trailer and will soon be up and running. This scraper can move 2,000 cubic meters of material per hour, ”said Bernhard Schulte Shipmanagement, technical manager of Ever Given.

The SCA said it would welcome a U.S. offer for help. Turkey also said it could send a vessel to the waterway, amid a recent push by Ankara to repair ties with Egypt after years of turmoil.

Traffic bans through the narrow channel linking Europe and Asia have deepened problems for shipping lines that were already suffering from coronavirus-related setbacks in supplying retail goods to consumers.

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IMPACT ON OILE

About two dozen vessels were seen off the coast of Port Said on Friday morning, according to a Reuters witness.

Oil prices rose 2% at more than $ 63 per barrel on Friday as more than 30 oil tankers have been waiting on both sides of the waterway since Tuesday, shipping data on Refinitiv showed.

However, the delay comes at a time when there is low seasonal demand for crude oil and liquefied natural gas (LNG), which is likely to mitigate the impact on prices, analysts said.

Data intelligence firm Kpler said 10 crude oil tankers were waiting to enter the waterway. About 4 million barrels of Kazakh bulk CPC Blend and some Russian Urals were waiting along with tankers carrying Libya, Azeri and some North Sea crude oil for an Asian refiner, traders said .

The Egyptian SUMED pipeline operator immediately contacted crude traders to see if they wanted to reserve a place in the system but so far, traders prefer to wait until additional costs are high. to avoid.

Graphics: Black Sea fuel shipping levels jump to Mediterranean –

Analysts expect smaller tankers carrying oil products, such as naphtha and fuel oil, to export from Europe to Asia will have a greater price impact if the canal remains closed for weeks.

“About 20% of Asian naphtha is supplied by the Mediterranean and Black Seas through the Suez Canal,” said Sri Paravaikkarasu, FGE’s director of Asian oil, adding that the diversion of vessels could around Cape of Good Hope adding about two weeks and fuel costs in addition to the voyage.

The ban is putting pressure on the already weak Asian gas, or diesel market. More than 60% of Asian exports to the west flowed through the Choked Canal in 2020, according to FGE.

Graphics: Tanker Density at Suez Canal –

“Aframax and Suezmax rates in the Mediterranean have also responded initially as the market is starting to price in fewer vessels available in the region,” said shipmaker Braemar ACM .

It appears that at least four Long-Range 2 tankers that may be heading for Suez from the Atlantic basin are now evaluating a corridor around the Cape of Good Hope, he said. Braemar ACM. Each LR-2 tanker can carry approximately 75,000 tons of oil.

The cost of clean goods, such as gasoline and diesel, from the Russian port of Tuapse on the Black Sea to the south of France jumped 73% over the past three days to $ 2.58 a barrel on March 25, according to Refinitiv Eikon data.

Graphics: Large, ever – carrying carriers stop traffic in the Suez Canal –

The shipping index benchmark for LR2 vessels from the Middle East to Japan, known as TC1, has risen by a third from last week to 137.5 global points, said Anoop Jayaraj, a net tanker broker at Fearnleys Singapore. Worldscale is an industrial tool used to measure product levels.

Similarly, the index for cargo levels for Long-Range 1 (LR1) vessels stood on the same path, known as TC5, at 130 global points on Friday, up from 125 at the end of last week. Worldscale is an industrial tool used to measure product levels.

On the LNG side, Kpler said 10 loads were maintained, six of which were loaded and several LNG tankers removed, one Singapore-based ship breaker said.

If the blockade lasts for two weeks, it could delay the delivery of around one million tonnes of LNG to Europe, according to Rystad Energy, which could more than double in a worse month – long closure. . Some European buyers who are concerned about delays in Qatari LNG delivery may consider buying in the spot market.

Meanwhile, oil traders told Reuters that they are taking a wait-and-see approach to see if the full high would help on Sunday.

Reporting with Florence Tan, Jessica Jaganathan, Gavin Maguire, Roslan Khasawneh, Koustav Samanta in Singapore and Nadine Awadalla in Cairo; Additional commentary by Gleb Gorodyankin, Olga Yagova in Moscow and Julia Payne in London; Edited by Simon Cameron-Moore, Christopher Cushing, Emelia Sithole-Matarise and Frances Kerry

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